Thursday, May 24, 2007

Who's Dreamliner and Will We Pay Attention?

The first Boeing 787 Dreamliner has entered production. I caught the news blast on the Nighty Business Report, your friendly neighborhood business news report that sticks to the facts. Apparently, orders are coming in at a nice clip, helping buoy Boeing's stock 1.94% in today's trading. What I found interesting about the story was that Boeing originally set out to build a plane that would fly higher and faster when it started the process 6 years ago. Due to customer input (the airlines) they changed their design mission to a smaller, more efficient plane that can fly 250-300 people to more places more often. In a unique partnership arrangement, Boeing partnered with GE and Rolls-Royce on engines that are slated to be at least 8% more efficient. Combined with the groundbreaking use of composites for the skin of the plane (until recently composed of aluminum) to reduce weight, the overall plane stands to be 20% more efficient than the model it is replacing. That's not an insignificant number.

Clearly, Boeing's customers were concerned with rising fuel prices and public concern about noise around airports. What I am not certain about is how climate change figured into the equation. With global CO2 regulations looming on the horizon, the future remains unclear for how airlines will be affected. Hedging against future fuel price increases as well as CO2 regulations is just good business. The airlines that buy more fuel efficient planes may even be in a position to generate some extra revenue if they emit less carbon than they are allotted. This is assuming they are subject to a CO2 emissions trading scheme.
Given GE's Ecomagination initiative, this certainly makes for good PR for them. I am curious; will the airlines that buy these more fuel efficient planes market the fact to consumers to help differentiate them in the extremely competitive and "zero loyalty" marketplace? Talk about greenwashing...but at least it is a small step in the right direction.

Amory Lovins discusses the hypercar in Natural Capitalism as one of myriad solutions to our energy gluttony. One of the key elements of the hypercar is the use of carbon fiber that can be reused and recycled many times after the initial design for the car. Perhaps Boeing has plans for reusing the carbon fiber at the end of the plane's life, or at the very least remanufacturing it and reselling it as a raw material to other companies.

Here's one that relies on consumers paying attention, which is always a challenge. Proctor & Gamble is introducing smaller more concentrated detergents. The products will be introduced soon in parts of the southern US and Puerto Rico with a full roll-out slated for next year. I am certain that they are starting in smaller markets to gauge the reaction and tweak their marketing to educate consumers, who generally think that bigger is better, that they are getting essentially the same service for their money. Consumer specialists are concerned that Joe and Jane Shopper will not notice the same number of loads in the smaller container and continue to use the same amount per load, potentially becoming annoyed with the perception that they are getting less.

Now lets get real. Manufacturers do whatever they can to make their products stand out on retailers' shelves. Snazzy graphics, POP displays, and of course BIG packages. Oh, but guess what? Wal-Mart has been promoting smaller, concentrated cleaners along with their smaller packages. P&G is motivated by fulfilling a huge customer's need as much as a sustainability mission. Great.

Do they have both? Yes. No. Maybe? Are any of the companies here "sustainable"? Not yet. They're trying. Efforts like this must be driven by value to the customer (a key stakeholder), the environment, and the bottom line. These seem to have that, to some extent.

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